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Right to Light

25th July, 2013

This follows on from the article we published in September 2012 regarding consenting to infringement of rights to light which can be viewed HERE

The Law Commission, being the body charged with keeping the law under review and recommending reform where it is needed, has suggested changes to give certainty in the law.

What is a right to light?

A “right to light” is a type of property right known as an easement. Such right entitles a landowner to receive enough natural light passing over a neighbour’s land to enable the ordinary use of the landowner’s building. The neighbour’s land cannot substantially interfere with such right, for example by erecting a building in a way that blocks the light, without the consent of the landowner.

Rights to light are valuable as they give landowners certainty that natural light will continue to be enjoyed by the property increasing its utility, value and amenity. Landowners may be able to prevent (or in some instances require the demolition or cutting back of) construction that would interfere with their rights. Where development has taken place but the court does not order its demolition, the court may award substantial damages. It may not be clear which remedy the court will order and landowners may succeed in preventing development even if they raise the issue after building has commenced.

Following the Law Commission’s Easements project in 2011 it became clear further work was needed separately on rights to light. A new consultation on Rights to Light took place between 18 February 2013 and 16 May 2013.

The Law Commission is currently analysing consultees’ responses and will review, in discussion with Government, how to take the project forward in the light of these responses. If the project proceeds to a final report with draft bill, the Law Commission anticipates that publication will be in late 2014..

This project will be of particular interest to landowners, developers and property lawyers seeking to defend right to light claims especially following the decision in HKRUK II (CHC) Ltd v Heaney (2010) ( the “Heaney decision”).

In the “Heaney decision”, the High Court granted an injunction requiring partial demolition of a completed building which obstructed a landowner’s right to light. Before this decision it had been thought it would be difficult to obtain an injunction in such circumstances and that damages would be awarded instead.

Commentators say this case has had a detrimental effect on the ability of rights to light disputes to be resolved swiftly and amicably. Some feel that a neighbouring owner (or developer) who is proactively trying to negotiate a resolution would be frustrated by a neighbour who will not engage in order to try and increase the sum they can demand for damages. Due to this uncertainty as to exactly when a court will grant an injunction, the “Heaney decision” makes it very difficult for advisers to establish the likelihood of any threat being successful.

The Law Commission is not proposing to abolish rights to light altogether but instead to seek a fair balance between the interests of landowners and the needs of neighbouring owner (or developers) seeking to build. The project looks at the entire life cycle of a right to light from creation to extinguishment in relation to private law easements only. No proposals are made in respect of the interrelationship of rights to light with planning laws. It examines the remedies available to the courts and whether these are reasonable, sufficient and proportionate.

The three key objectives of the Right to Lights project are:

1.To attempt to introduce greater certainty and transparency into rights of light law making disputes simpler, easier and quicker to resolve.

2.To ensure rights to light do not act as an unnecessary constraint on development. The availability of modern, good quality residential, office and commercial space is important to the success of modern town and city centres and to the economy more generally.

3.To make sure the important amenity value of rights to light remain protected under the law.

The consultation paper therefore makes several provisional proposals:

1.It should no longer be possible to acquire rights to light by 20 years long user known as “prescription”.

2.The introduction of a new statutory test to clarify the current law on when the courts may order a person to pay damages instead of ordering an injunction to demolish to stop constructing a building that interferes with a right to light.

3.Introduction of a new statutory notice procedure which would require landowners to make it clear whether they intend to apply to the court for an injunction.

4.That the courts should be able to extinguish rights to light that are obsolete or have no practical benefit, with payment of appropriate of compensation.

No future acquisition of rights to light by long use

Although rights to light can be created by express agreement between landowners, by implication or through long use /”prescription”, it is only those acquired by long use/”prescription” that raises issues about law reform.

The Law Commission is proposing to abolish the ability to acquire rights to light by long use /”prescription”. It would have no impact on rights already acquired by prescription and they would continue to be valid.

Transitional provisions are also proposed for those people who have received light over neighbouring land for 19 years and 1 day. They will be able to complete their full 20 years use and crystallise their rights to light under the Prescription Act 1832, provided they bring their claim on the correct day.

The number of rights to light, due largely to the ease by which they can be acquired, can considerably increase the costs of developing land and delay the delivery of projects. As we have seen, the threat of injunction or high levels of damages payments can also considerably raise the risks associated with developments. This creates difficulties in financing and pre-letting of buildings. It increases the costs of development and causes deadlines to be missed.

In many cases neighbouring owners and land owners will be unaware of their existence. There will have been no activity on the neighbouring land affecting the right and the landowner’s right to light will rarely have been registered.

■Neighbouring owners are unlikely to be aware of the landowner’s ability to acquire a legal right to light if the landowner’s receives light from the neighbouring owner’s land for 20 years. . A landowner’s property may benefit from rights to light against neighbours to the North and West but not to the South or East.

■Those with the benefit of a right to light will often agree to release it for a substantial amount of money, which is not protecting the light but instead has become a tool to extract money for neighbours proposing to develop their land.

A right to light will not be acquired through long use / “prescription” if it is obstructed for one year continuously. The Rights to Light Act 1959 provides a method of creating a notional obstruction by service of a notice and registration of a local land charge which would show up on a local search.

The Rights to Light Act 1959 would become redundant as there would no be longer a role for light obstruction notices. This would be repealed once the ability to acquire rights to light through long use / “prescription” was abolished.

If the ability to acquire rights to light through long use / “prescription” is not abolished, the Rights to Light Act 1959 should not be repealed as it serves a useful function by providing a means of interrupting the acquisition of an easement without having to erect a physical obstruction. However, the procedural requirements for the service and registration of light obstruction notices can be unnecessarily cumbersome and views are sought on reform and simplification of the requirement.

A statutory test for when a court may award damages instead of an injunction

The principal remedies for the infringement of rights to light are injunctions and damages

Injunctions

The general rule is that the remedy for the infringement of a right to light is an injunction. The claimant does not have the right to an injunction. As it is an equitable remedy, it is within the discretion of the court whether or not to grant one. If damages would be an adequate remedy, the court may not award an injunction.

Shelfer v City of London Electric Light Company (1895) (“Shelfer”) remains the leading case to be applied by the courts when deciding whether to award damages in substitution for an injunction. Shelfer The ” Shelfer” test is currently geared towards assessing whether it would be oppressive for the court to grant an injunction.

The Law Commission provisionally proposes that damages be awarded in substitution for an injunction in rights of light cases if the grant of an injunction would be disproportionate. The factors to be considered are:

■The size of the injury in terms of loss of amenity;

■Whether a monetary payment will be adequate;

■The conduct of the landowner;

■Whether the landowner unreasonably delayed in bringing proceedings; and

■The conduct of the neighbouring owner.

Damages

At common law, damages that a landowner may recover must be equivalent to the losses that has actually been suffered. Save for one exception, the heads of damages for the infringement of a right to light are:

■physical damage or financial loss suffered;

■loss of amenity; and

■diminution in value of the claimant’s property.

The exception to the general rule is damages for the loss of bargaining power.

The problem with common law damages is that they can only be awarded in respect of losses suffered up to the date of trial.

However, equitable damages may be awarded instead of an injunction. When assessing damages the courts can take account of the estimated profits the proposed development would make and are usually more generous than the amount of actual loss suffered.

The Law Commission proposes reform of the assessment method of equitable damages and a cap of damages awarded. One option on the cap of equitable damages would be for it to be limited to the open market value of the landowner’s property without regard to ransom potential. This could avoid extremely high awards of damages being made but it would also be susceptible to fluctuations in the value of land.

The Law Commission have therefore considered a number of possible options for reform of how equitable damages are assessed including:

■A greater role for comparable transactions:

■Changing the measure of equitable damages to diminution in value (plus damages for loss of amenity and for any financial losses suffered due to the infringement); and

■The addition of a statutory uplift to be applied to the diminution in value figure.

The introduction of a new statutory notice procedure

As the “Heaney decision” highlights, where extensive negotiations carried on without conclusion for several years, there is no point in time at which a developer can build safely in the knowledge that no injunction will be granted because of delay. A new Notice of Proposed Obstruction (“NPO”) procedure is therefore planned to address this issue.

Whilst rights to light are an important and valuable way of preserving the light received by properties, they can be used as a means of extracting money from property developers. The threat of an injunction can be deployed to extract payments that are out of proportion to any loss suffered.

Neighbouring owners / developers require certainty as projects are time sensitive. It is in the landowner’s interest to draw out the negotiations for as long as possible to increase the price the neighbouring owner /developer is willing to pay to secure release of the right.

Whilst developments facilitate growth , increased costs may be passed on by the developers. This impacts on public projects and rents and the advantages of regeneration are postponed. Uncertainties in timing can result in difficulties with pre-letting and securing funding.

A notice procedure is proposed to require the landowner to make it clear if they want an injunction. Such procedure would be used as a last resort following the failure of .

The form and content of the notices

Draft clauses can be found in Appendix C of the Law Commission’s Consultation Paper which cover the main substance of the procedure. Issues such as service of the notice or costs are not dealt with. The form and content of the “NPO” has been designed to be easily updated.

The neighbouring owner / developer (as a corporate body or natural person) with an interest in the freehold or leasehold land would serve on the landowner a ”NPO” setting out information about the extent of the anticipated obstruction and asking if the landowner proposed to seek an injunction.

The landowner has 4 months to seek professional advice. The landowner is obliged to either serve a counter-notice specifying whether or not they objected to the development or issue proceedings. If a counter-notice objecting was served then the parties would continue negotiating for a further 4 months to. If no agreement has been reached then the landowner must issue proceedings before the end of this period. At the same time they would also need to satisfy the requirements of the Civil Procedure Rules relating to pre-action conduct before issuing the claim. If the landowner failed to object by either serving a counter-notice or issuing proceedings, then an injunction would no longer be an available remedy, although they still could be awarded damages.

The rules governing service of the notice

The Law Commission envisage the rules governing service of the “NPO” be based on the current general provisions on service of notice contained in Part 6 Civil Procedure Rules and the s6 Acquisition of Land Act 1981 (used in compulsory purchase cases).

The third party effect of the notice

The “NPO” will be addressed to someone with a freehold or leasehold estate in land and take effect against the estate rather than be personal to the addressee so that the addressee cannot avoid its effects by a selling off the land. It is therefore proposed that registration of the notice is made on the local land charge register. The local land charge register is maintained by local authorities and it is always searched by a purchaser’s conveyancer as part of their pre-contract investigations of title. Once registered as a local land charge, the “NPO” will be effective against all successors in title including a mortgagee.

Multiple notice and shelf life and costs recovery

Two problems need to be avoided. The service of multiple notices and notices served in the past being used many years in the future. It is proposed there should only be one “NPO” issued at any time with a validity period of 5 years covering building plans before commencement or during the course of building works. If the obstruction resulted in a lesser infringement, the “NPO” would remain valid. If the neighbouring owner’s / developer’s plans change and resulted in a greater infringement the “NPO” would no longer be valid meaning a neighbouring owner / developer will never serve a “NPO” on a whim.

As to costs, the neighbouring owner / developer should be under a continuing obligation to inform the landowner of changes to its plans. Any failure to do so would be taken into account by the courts when assessing costs and the court should be given wide discretion to make any order as to costs as it thinks fit.

Residential property landowners are more likely than commercial landowners to want to keep their light rather than negotiate a release of their right, so the Law Commission is also seeking views restricting the use of the “NPO” procedure to commercial properties only.

Extending the jurisdiction of the court – the Upper Tribunal (Lands Chamber)

The Upper Tribunal (Lands Chamber) decides certain disputes concerning land. The Law Commission proposes that it has an increased role in disputes about whether rights to lights have been abandoned.

To recap the legal position, rights to Light can be brought to an end:

■Where the landowner and the neighbouring owner agree it should happen;
■By unity of ownership and possession of both the landowner’s property and the neighbouring property;

■Where a right to light is abandoned; or

■Where statutory powers are used.

It is only the third of these points that raise issues for reform.

Abandonment – options on law reform

Non-use of a right to light is a positive action so it is easier to infer an intention to abandon a right of light permanently than other easements.

Where windows are bricked up there is no difficulty in a court inferring the necessary intention to abandon the right to light permanently, and the longer windows are obscured the more likely it is that this will be the conclusion.

However, the issue is slightly more complex where a property is demolished but not rebuilt. The key factor is whether there was an intention to abandon the right. In situations where the property is demolished and rebuilt with the windows in different positions, the law can be more difficult to apply. Problems also arise where windows are altered in size. The consequence of an alteration may be that a right to light is abandoned but it is clear that rights to light are capable of surviving alteration. A right to light is not abandoned simply because the property is demolished and built with new windows provided light is received through a proportion of the new window.

The legal test for when a right to light can survive the alteration of a window is conceptually simple but practically complex and the courts have made it clear in several cases that the right to light will survive the alteration of an aperture.

The possibilities for reform in this area of law include:

■A prohibition on a right to light surviving the alteration of a window;

■A revised test for establishing when a right to light survives the alteration of a window; and

■The introduction of a registration requirement.

Extinguishment by s237 Town and Country Planning Act 1990 (“TCPA”)

Section 237 of the TCPA 1990 is a planning law power that allows the overriding of easements and other interests that affect land in certain circumstances. It is exercisable by local authorities where they have acquired or appropriated land for planning purposes. Where s237 take effect an easement is no longer exercisable and the landowner has a right to compensation.

The operation of s237 is outside the scope of the right to light project. However, it is a useful mechanism to manage some of the problems associated with rights to light in limited circumstances if a private developer can get the local authority involved They cannot be compelled to exercise the power. It is subject to conditions and considerations that are related to the local authority’s public function and it is likely to be use only in respect of a small number of developments mainly because the development site is likely to be owned by a third party developer.

Section 84 Law of Property Act 1925 (LPA 1925) – discharge and modification grounds

Once the recommendations made in the Law Commission’s Easement Report are implemented, all easements, including rights to light, will be capable of modification or discharge by the Lands Chamber of the Upper Tribunals pursuant to Section 84 LPA 1925.

Here is an overview of what is required for a discharge and modification under s84 LPA 1925 (“s84”)

■First . a change in character of the property so that the right to light has no practical use i.e. a bricked up window ought to be obsolete.

■Secondly, the continued existence of the restriction impedes reasonable use of the land. Removal seeks to provide a fair balance between the needs of public and private development in the area and the protection of private contractual rights.

■Thirdly, all persons entitled to the benefit of the restriction agree expressly or impliedly by their acts or omissions to the discharge or modification.

■Fourthly, the proposed discharge or modification will not injure the persons entitled to the benefit of the restriction. It is currently used to stop vexatious or frivolous objections to applications to discharge or modify restrictive covenants.

No proposal is made to change compensation awarded under “s84” which provides for either (i) a sum to make up for loss or disadvantage suffered by that person in consequence of the discharge or modification; or (ii) a sum to make up for any effect which the restriction had at the time when it was imposed in reducing the consideration then received for the land affected by it.

European Convention on Human Rights

If an application following implementation of the proposed change to “s84” is successful and the easement is to be discharged or modified, as a result two articles of the European Convention on Human Rights (“ECtHR”) may arise in the proceedings.

Article 1 of the First Protocol (“A1P1”) of the convention is regarded by “ECtHR” as encompassing three rules

1.General principle of peaceful enjoyment of possessions;

2.Rule about deprivation of possession; and

3.Rule about control of use.

It is the Law Commission’s view that modification or discharge of an easement under “s84” would therefore be compatible with “A1P1”. This is because the Upper Tribunal (Lands Chamber) will not make an order discharging or modifying a right unless there is either loss of amenity or the loss has been subjected to the careful balancing against the public interest that the convention requires and is likely to order compensation.

Article 8 of the convention provides the right to respect for the home, although home has been given a broad interpretation to include holiday homes and business premises.

In the Law Commission’s view, the assessment performed by the Upper Tribunal (Lands Chamber) when considering the grounds in “s84” ensure compliance with Article 8. A right would only be discharged or modified under “s84” if it was obsolete, caused no injury or impeded the reasonable use of the land conducting a balancing exercise to weight the public interest against the individual interest.

The Law Commission therefore propose that the powers of the Upper Tribunal (Lands Chamber) should be extended to enable it to make orders for the modification or discharge of existing rights to light.

So, overall, whilst some may welcome the suggested changes, it remains to be seen if these proposals ever see the light of day!

Details of the Law Commission consultation can be found HERE

For further information please contact:

Emma McGlinchey, Partner, on 01244 405567 or email [email protected]; or

Stephanie Brayshay, Solicitor, on 01244 405417 or email [email protected]

 

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